IA Clarington announces intent to cap sales of six corporate class funds

TORONTO, March 28, 2013 /CNW/ - In its budget announcement last week, the federal government moved to eliminate the tax benefits associated with character conversion transactions.  This includes forward contracts utilized by the mutual fund industry within corporate class fund structures. 

After consulting extensively with external counsel and tax advisors to determine the longer-term impact on several funds within its corporate class structure, IA Clarington Investments Inc. ("IA Clarington" or the "Company") is announcing that it is capping sales into the following funds effective as of the close of business on Thursday April 4, 2013. 

  • IA Clarington Focused Balanced Class
  • IA Clarington Global Tactical Income Class
  • IA Clarington Strategic Corporate Bond Class
  • IA Clarington Strategic Income Class
  • IA Clarington Tactical Bond Class
  • IA Clarington Tactical Income Class

"With the uncertainty about the ability to upsize the forward contracts, we feel that the most prudent course of action is to protect the existing shareholders and their assets in the corporate class funds that are affected by this change," said David Scandiffio, President of IA Clarington. The Company advises that, as permitted under the budget, and pending further clarification by the Ministry of Finance, the funds will continue to use the forward strategy for approximately 180 days for existing assets only.

This announcement does not impact sales within other IA Clarington equity, balanced or short-term income corporate class funds, and the original benefits of corporate class investing remains in effect:

  • The ability to defer tax when switching between funds within the same family of corporate class funds
  • The ability to reduce taxable distributions by sharing excess losses and expenses between funds in the same family of corporate class funds

About IA Clarington
IA Clarington Investments Inc., a subsidiary of Industrial Alliance Insurance and Financial Services Inc., markets a wide range of investment products, including mutual funds and segregated funds managed by leading portfolio advisors. The Company's philosophy is to select best in class money managers from across Canada and around the world to manage its funds. IA Clarington managed approximately $12.3 billion in assets as at February 28, 2013. www.iaclarington.com

SOURCE: IA Clarington Investments Inc.

For further information:

Crystal Quast
Senior Director, Media Relations
TMX Equicom
(416) 815-0700 ext. 266


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